The Crush - November 2019 - 1

theCrush
Volume 46 Issue 11 November 2019

[ FEATURE STORY ]

Market Factors Affect 2019 Winegrape Harvest
INDUSTRY EXPERTS WEIGH IN ON THE SEASON AND FUTURE
By Ted Rieger
California's 2019 winegrape harvest saw favorable weather
from mid-August into October for grape ripening and quality
and for bringing in the crop without a compressed picking
schedule. Most regions had the majority of crop picked by late
October. However, two events created logistical issues at the end
of harvest that affected picking schedules, grape deliveries and
winery operations in some areas: the Pacific Gas & Electric Co.
public safety power shutoffs in Northern California that began
Oct. 9 and the Kincade Fire with evacuations in Sonoma County
that started Oct. 23.
Overall, 2019 yields are reported to be around average. Total
statewide winegrape tonnage will likely be less than the 2018
total of 4.3 million tons.
From a market standpoint, slowing wine sales trends, higher
wine inventories and winery capacity constraints led to more
grapes going unsold this year, particularly for growers who had
grape contracts that expired or were revised between the 2018
and 2019 vintages. Allied Grape Growers President Jeff Bitter
said, "Grapes under contract came in under contract, but grapes
not under contract were more likely to stay on the vine because
the spot market was rougher this year."
Bitter estimated this year's spot market was less than one-third of
total statewide grape sales. The percentage of spot market sales
fluctuates annually based on contract expirations and renewals.
In recent years, contracts have covered a planting agreement and
up to 10 to 12 years of grape purchases, or in other cases, have
been written for an ongoing relationship with renewal every
three to five years. With renewals this year, Bitter said
buyers offered fewer long-term contracts,
sometimes offered only one-year contracts,
and for less tonnage and lower prices.

Unsold grapes were left on the vine in most regions this year. Photo: Ted Rieger

"The reality is that the industry is sufficiently full of inventory,
which has reduced demand for grapes," Bitter said. "There is not
a region or a variety that is completely immune from some level
of market pressure."
Glenn Proctor, partner and grape broker with The Ciatti
Company said, "It was a very tough market this year, as tough as
we've seen for a number of years going back to 2009-2010." He
added, "Any time you see growers posting 'grapes for sale' signs
in vineyards, which we saw in Napa and in Lodi, it's a signal
there aren't buyers for what's out there. Almost all varieties in all
growing areas had crop unsold and fruit left on the vine."
Coming off a large 2018 harvest, Proctor said, "Everybody had
inventory, sales are not as fast, and entering 2019, wineries had
high inventory bought at high cost based on past contracts.
Wineries tried to adjust to their 2019 commitments, and build
flexibility into buying based on the current market. As a result,
there was very muted buying activity on the spot market, and very
little activity from the traditional larger buyers in the market."



The Crush - November 2019

Table of Contents for the Digital Edition of The Crush - November 2019

The Crush - November 2019 - 1
The Crush - November 2019 - 2
The Crush - November 2019 - 3
The Crush - November 2019 - 4
The Crush - November 2019 - 5
The Crush - November 2019 - 6
The Crush - November 2019 - 7
The Crush - November 2019 - 8
The Crush - November 2019 - 9
The Crush - November 2019 - 10
The Crush - November 2019 - 11
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